The AIR Act

Pennsylvania’s airports are essential to our economy, our communities, and our future. That’s why the Aviation Council of Pennsylvania is proud to champion the AIR Act—a bold, forward-looking investment strategy that secures $120–160 million annually to modernize our aviation infrastructure, expand workforce development, and accelerate innovation across the Commonwealth. With a funding model that uses aviation-generated revenues and a portion of existing state sales tax—without raising general taxes—the AIR Act provides a stable, long-term solution to help Pennsylvania compete nationally, unlock federal dollars, and ensure every airport, from urban hubs to rural fields, has the resources to thrive.

Summary

Aviation is a cornerstone of Pennsylvania’s economy, safety, and workforce. The Commonwealth’s 119 public-use airports support business growth, emergency response, healthcare access, tourism, agriculture, manufacturing, and rural connectivity across every region of the state.

In 2019, aviation generated approximately $34 billion in economic impact—about $42–$43 billion in today’s dollars—and supports more than 226,000 jobs statewide. Aviation delivers one of the strongest returns on investment of any transportation mode, creating economic benefits far beyond airport boundaries.

Yet Pennsylvania’s aviation funding system has not kept pace. Federal dollars help attract activity, but sustained state investment keeps airports safe, operational, and competitive. Without sufficient support, airports struggle to maintain infrastructure, preserve safety, and pursue projects that generate revenue and reduce long-term reliance on public funding.

The strain is already evident. Pavement conditions are declining, costs continue to rise, and deferred maintenance leads to significantly higher future expenses. Inflation, construction costs, and outdated funding mechanisms further limit the Commonwealth’s ability to respond effectively.

Grounded in the 2022 Transportation Advisory Committee report, the Pennsylvania Aviation Investment & Reform (AIR) Act modernizes aviation funding, ensures aviation revenues are used for aviation purposes, and establishes a long-term strategy for growth and competitiveness.

By delivering approximately $120 million annually through a strengthened Aviation Restricted Account and a new Aviation Trust Fund, the AIR Act protects infrastructure, enhances safety, expands economic opportunity, supports workforce development, and secures Pennsylvania’s aviation future.

Delaying action will only increase costs and risk. Each year of inaction raises project costs, accelerates infrastructure decline, and shifts economic opportunities to neighboring states. The AIR Act is designed to reverse these trends, reduce long-term liabilities, and ensure Pennsylvania’s aviation system remains safe, competitive, and economically productive.

Aviation Trust Fund (ATF)

The AIR Act creates a $120 million Aviation Trust Fund to bring all aviation funding under a single, transparent system. The Aviation Restricted Account is incorporated into the Trust Fund, ensuring aviation revenues are segregated and used exclusively for aviation purposes.

This structure enhances transparency and accountability by clearly tracking how aviation dollars are collected and invested, while providing a stable, sustainable funding source to support the full range of airport needs. The Trust Fund includes $60 million in traditional aviation funding through the Aviation Restricted Account and $60 million in flexible funding to support economic development, air service, safety, and emerging aviation technologies.

Funding is distributed through a structured, percentage based framework that ensures airports of all sizes receive support while enabling strategic statewide investments. Through Aviation Opportunity Grants, the Commonwealth can fund projects not typically prioritized under traditional programs, including revenue generating projects, air service development, and emerging aviation initiatives.

The Aviation Trust Fund aligns how aviation revenue is generated with how airports operate and compete, without relying on new bonding or competing with other transportation funding priorities.

Aviation Restricted Account (ARA)

The Aviation Restricted Account provides dedicated, traditional funding to support Pennsylvania’s core aviation infrastructure and safety needs. Under the AIR Act, it is strengthened within the Aviation Trust Fund, ensuring all aviation revenues remain protected and focused on aviation purposes.

This funding supports critical investments such as airport development, maintenance, and safety improvements, while providing a stable and predictable source of funding that airports rely on to operate and compete.

Investment – Total ~120 Million

  1. Unrestricted Revenue Sources (ATF)- Estimated Total: ~$60 Mil
  1. 0.425% of Article II Sales and Use Tax collections estimated- $60 mil.
  2. Interest earnings and other deposits: estimated- $0.25 mil.
  1. Restricted Revenues (ARA) Estimated Total: ~$60 Million
  1. Multimodal Aviation estimated- $18 mil.
    • Increases current $8.26 million to $18 million annually 
  1. Aircraft Fuel Taxes
    • Jet Fuel Tax: estimated- $38 mil.
      • 8¢ per gallon beginning in 2027 
      • Below the surrounding state average of 11¢ per gallon 
      • Indexed annually to the Consumer Price Index (CPI) beginning in 2028 
  • Aviation Gasoline (AvGas) Tax: estimated- $1 mil.
    • 24¢ per gallon beginning in 2027 
    • Indexed annually to CPI beginning in 2028 
  • Alternative Aviation Fuels – Electric, Hydrogen, etc: estimated- $ tbd

Beginning in 2030, alternative aviation fuels and energy sources are taxed on a jet-fuel gallon equivalent basis using an energy value determined by the Department of Revenue.

Phase-In Schedule

  • 2030: 25% of the jet fuel equivalent rate 
  • 2035: 50% of the jet fuel equivalent rate 
  • 2040: 100% of the jet fuel equivalent rate 

This approach encourages innovation while preserving long-term revenue equity and fairness across propulsion systems. 

  1. Aircraft Registration, Licensing & Inspection – beginning January 2028
  • Aircraft Registration –estimated: $1.5 mil.
    • Non-commercial aircraft: $25 per seat, capped at $750 
    • Commercial aircraft: $50 per seat, capped at $2,500 

Seating capacity is determined by the department using FAA records, certifications, manufacturer specifications, or other reliable documentation.

  • Airport Licensing & Inspection estimated: $0.25 mil.

All airports and regulated aviation facilities remain subject to Commonwealth licensing and inspection requirements. Public-use facilities continue to be licensed and inspected as part of statewide safety oversight.

Licensing & Inspection Fees – Fees Only Apply to Private-Use Facilities

  • Private facility with only unpaved aircraft operating areas: $250 annually 
  • Private facility with one or more paved aircraft operating areas: $500 annually
  • Temporary license: $250 
  • Standard inspection: $600 (Every 5 years) 
  • Reinspection: $300 
  1. Fines, Penalties, & Fees estimated: $0.6 mil.
    • Obstruction and hazard violations – $1,000 for each day of violation
    • Revenues from use of the State Aircraft: 
  1. Interest on the Account estimated: $1 mil.

Restricted Revenue Uses (ARA)

  1. Fuel Tax Turn Back Program

A core reform of the AIR Act ensures airports directly benefit from aviation activity tied to their facilities.

Each eligible airport receives the greater of:

  • 50% of aviation fuel and aviation energy tax revenue attributable to that airport, or 
  • 10% of annual FAA entitlement funding attributable to that airport 

This creates a dependable local revenue source many airports currently lack. These dollars may be used for Aviation Development Program purposes or federal match requirements.

  1. Airport Development Program grants 

The AIR Act strengthens—not replaces—the ADP.

  • ADP remains funded through the ARA 
  • Commonwealth participation increased to 75%–100% of eligible project costs 
  • Greater alignment with FAA Airport Improvement Program and Airport Terminal Program flexibility 
  • Existing scoring and administrative processes remain intact 
  1. Public airport real estate tax reimbursement 

The AIR Act modernizes and expands the existing program.

  • Applies to any licensed public-use airport regardless of sponsor type 
  • Eligible land includes aviation-related areas such as hangars, terminals, operational land, support facilities, and other aeronautical uses approved by the department 
  • Annual cap tied to ARA appropriations with pro rata distribution if oversubscribed 
  1. Aviation Workforce Development 

The AIR Act dedicates 10% of funding to workforce development, with half of that funding directed to a designated organization to support statewide aviation education and training initiatives, and the remaining portion supporting broader workforce pipeline and career pathway programs.

  1. Programs of Statewide Significance

The AIR Act gives Pennsylvania the ability to bundle critical safety and preservation needs into coordinated statewide initiatives rather than forcing airports to solve the same problems individually.

By addressing these needs at scale, the Commonwealth can improve safety, reduce costs, accelerate delivery, and ensure smaller airports are not left behind.

  1. Administrative costs capped by statute 

The AIR Act establishes a clear limit on administrative costs to ensure the vast majority of funding is directed to airports and aviation programs. Administrative expenses are capped at 10% of Aviation Restricted Account revenues, with an additional allowance of up to 10% of state-disbursed federal aviation funding to support program administration. This structure provides the resources needed to effectively manage and deliver programs while maintaining a strong focus on investment in Pennsylvania’s aviation system.

Unrestricted Revenue Uses (ATF)

Aviation Trust Fund Allocation Framework

  1. 25% – Commercial Service Airports 
  2. 20% – General Aviation Airports 
  3. 10% – Public Airports not in the National Plan of Integrated Airport Systems 
  4. 10% – Hangar Development 
  5. 15% – Emerging Aviation Technologies 
  6. 2% – AirTAP and Statewide Aviation Conference 
  7. 0.5% – Aviation Advisory Committee 
  8. 7.5% – Department Aviation Initiatives 
  9. 10% – Administration of the ATF

Additional Authorities

  • Transfer authority to ARA up to one-third of annual ATF appropriations 
  1. Aviation Opportunity Grants (Allocations A-E)

Funds allocated under the ATF may be awarded as aviation opportunity grants to eligible entities for projects that directly benefit the Pennsylvania aviation system.

Eligible Uses Include

  1. Infrastructure & Capital
    • Airport development/Capital improvements 
    • Hangars 
    • Terminals 
    • Fuel farms 
    • Utilities 
    • Access roads 
    • Reconstruction and rehabilitation 
    • Pavement preservation 
    1. Air Service & Economic Development
      • Commercial air service development 
      • Route development 
      • Marketing 
      • Minimum revenue guarantees 
      • Other air service incentives 
      • Aviation economic development initiatives 
    2. Operations & Financial Support
      • Deicing 
      • Snow removal 
      • Emergency expenses 
      • Airport financial assistance 
      • Financing support 
      • Debt service and financing costs
    3. Technology & Innovation
      • Vertiports 
      • Heliports 
      • UAS infrastructure 
      • Advanced aviation technologies 
      • Electric aviation infrastructure 
      • Hydrogen aviation infrastructure 
      • Planning and innovation initiatives 
      • Aviation safety programs
    4. Strategic Investments
      • Multi-purpose projects 
      • Other aviation-related purposes determined by the department to directly benefit the statewide system 
  2. AirTAP and Aviation Conference (Allocation F)

The AIR Act creates dedicated support for AirTAP and the Pennsylvania Aviation Conference, modeled after LTAP, to provide statewide technical assistance, training, and information sharing for airport sponsors, operators, and aviation stakeholders. Together, they support best practices, regulatory awareness, and coordination across Pennsylvania’s aviation system.

  1. Governor’s Aviation Advisory Committee (Allocation G)

The AIR Act provides dedicated support for the Aviation Advisory Committee (AAC) to carry out its statutory duties, strengthening coordination, stakeholder input, and strategic guidance across Pennsylvania’s aviation system.

  1. Administrative costs capped by statute (Allocation H – I)

The AIR Act caps administrative costs of the Aviation Trust Fund at 10% and provides additional discretionary funding for department initiatives, including the state aircraft and other programs that support Pennsylvania’s aviation system.

Strengthening Oversight & Accountability

Annual Public Reporting

Beginning in 2027, annual public reports would detail:

  • Sources of funds distributed or awarded 
  • Grant recipients 
  • Project purposes and amounts 
  • Public transparency metrics 

Additional State Tools

The AIR Act also strengthens statewide stewardship through:

  • Obstruction enforcement authority 
  • Civil penalties up to $1,000 per day for violations 
  • Municipal airport hazard zoning backstop authority 
  • Authority regarding abandoned or derelict aircraft 
  • Enhanced planning and accountability tools

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